Marketing analytics is a dynamic continuous feedback loop on how a company is performing in their market. It canvasses brand; commercial; market & performance. The process involves collecting, processing and analyzing data, to enable marketers to make data-driven decisions.
Marketing analytics software is the measurement & analysis of marketing activities. With the resulting data served up through an online dashboard where marketers can retrieve and analyze it. Marketing analytics is a crucial process for determining return on investment of marketing activities.
This post includes:
- Why are marketing analytics useful?
- What do marketing analytics enable?
- How do marketing analytics tools work?
- How much do marketers invest in analytics?
- Best practices for setting up analytics for success
- Challenges and limitations of marketing analytics
- What’s coming in the future?
- Getting the most from marketing teams
- How do marketing analytics help determine your return on investment?
Why are marketing analytics useful?
Marketing analytics acts as a feedback loop to tell marketers how well they are engaging with customers. And then that enables teams to make better decisions, to fine tune their work, and ideally delver on the business objectives.
Marketing analytics tools include marketing metrics, a type of measure on what a customer is doing, or interacting with the marketing work created. A dashboard, which shows this information. And then Insights, when turn the data into meaning, as to what the customer is doing. Put together, these gives an overall context for the customer journey and how successful the company is.
What do marketing analytics enable?
Marketing analytics enables marketers to weigh what they got from their marketing efforts. This weight, is the return on investment. Without analytics, marketers would struggle to understand the cause and effect of their marketing programs and be operating in the dark. Which is why it is so important.
Marketing analytics enables marketers to:
- Understand performance.
- Establish KPIs and run internal scorecards.
- Benchmark performance.
- Predict future performance.
- Identify areas of improvement.
- Work more effectively with partners.
- Drive a more cohesive marketing strategy.
- Prove the ROI of efforts.
- Justify existing budgets.
- Open up new budgets.
- Explain to stakeholders what’s working.
- For managing team performance.
- Improve efficiency of their marketing (and advertising).
- Accountability and transparency.
- Create effective marketing reports.
- Inform data-driven strategy.
- Upskill juniors on the team.
All this equates to a smarter, more agile, marketing organization. To be effective with marketing analytics means being open minded and continually finding new ways of gathering data, processing it and deriving meaning from it.
How do marketing analytics tools work?
Typically a tracking code is installed on digital marketing activities. That measures or observes how customers interact with the marketing. And this data is then shown in an online dashboard.
Privacy has been a concern in recent years, and as such, many companies have shifted to a first party cookie eco-system. To preserve customers privacy whilst enabling businesses to improve their experience. Nonetheless, work continues to be done, to find new ways to strike that balance.
Common Marketing Metrics
Common marketing metrics that brands measure are:
- Reach, how many people their marketing reached.
- Impact, what sort of impact it had, whether that is attention, engagement, scroll.
- Conversion rate, what percentage of the audience took a next step.
They then may slice this data further, into time of day, day of week, device, traffic source, where the audience came from.
How much do marketers invest in analytics?
A common refrain, is getting more dollars working. Which is where top performers stand out, they help their dollars working more effectively through better data and insights. And with that lens, you can see why they are hard to beat.
This study uncovered that:
Top performers spend 5x more than their peers on Analytics & Measurement.
Performance takes investment. Another trend from that study is that companies are adopting more analytics tools, to help get greater granularity.
Marketing analytics is all about performance, and performance is relative. Each organization is trying to beat the competition. To grow their market share. But so, the more intelligence an organization has, it better positions them against their peers.
Best practices for setting up marketing analytics for success
To get the most out of marketing analytics, many companies adopt a process like this.
1. Start with the business objectives and marketing strategy
Understanding what marketing is trying to achieve first and foremost.
2. Find the metrics which suit those objectives
Zooming in on the most suitable metrics to measure, helps the team focus on the right things.
These metrics can become your KPIs or part of your internal scorecard for success. If you are working with partners, make them part of the process to select these.
3. Implement the measurement
Implement the analytics across your marketing mix Complete QA, to see that it is tracking as intended.
To do this effectively, make sure you allow time for this. Rushing it, can lead to mistakes and unintended consequences. This is a continuous process, to keep the right metrics and measures.
4. Collect data
Each day, you can see how data is coming in, in your online dashboard.
Many platforms can send you custom reports. Or an analyst can prepare them for you.
5. Make adjustments
Depending on what is meaningful for your work, making adjustments each day, week, or month. It’s about striking a balance depending on how long your content is in market. For shorter campaigns you may want to adjust more regularly.
For longer term, making adjustments each month might make more sense.
6. Create reports
Creating reports helps uncover areas of opportunity and holds the team accountable. They are also vital in helping other stakeholders understand how content is driving performance.
This is an area, where the value can be overlooked. But the act of putting in a report, on a regular cadence, helps the team continuously improve. And keep performance in mind.
Once a quarter, doing a workshop to look at all the data, reports and work. Then analyzing it to find trends, wins, areas of improvement.
This helps to prove out ROI but to then also provides data, to predict how future content investments will perform.
A pro-tip is to change the team creating these reports over time. This helps spread the intelligence and knowledge amongst the team, gets fresh eyes on the data and helps keep everyone fresh.
Challenges and limitations of marketing analytics
Data myopia is a common problem with marketing analytics. Where the measure becomes the target. Teams become overly focused on the data and lose sight of the bigger picture. The numbers and analytics are a result of the actions taken in the past, and being undertaken today. It is an imperative to keep the customer in sight and the business problems that marketing is seeking to address.
The limitation of marketing analytics is exactly this, it is an observation and summation of behavior in the market. But marketers need to stay attune to their own intuition, but also identify what the data isn’t telling them. Ensure the voice of the customer is being heard, or seeking what the customer is telling you through their actions. As the saying goes, the customer votes with their feet.
The future of marketing analytics
There are a number of trends that analytics folks need to be mindful of.
- Artificial intelligence (AI), helping to collect, organize and get more insight from data. Analysts need to keep up to date on developments and new tools in this space.
- Digital transformation, this is driving more and more of the customer journey in digital channels. Increasing the broad remit of marketing analytics teams. And increasing the available data.
- Privacy changes, changes with GDPR, CCPA, ATT, first party cookies. All change the nature of the marketing environment. Analysts need to keep on top of these changes.
- The shift to events, more marketing analytics is becoming event driven, which is driving complexity. Analysts need to work to keep it simple and focused on what they are trying to achieve.
Getting the most out of your marketing analytics
A suggested tip is for marketing teams to give analytics folks more time to experiment. To try new tools, to invest time in maintenance, QA’ing tools and set ups. Driving performance isn’t set and forget, it’s a continual process of improvement.
The sports analogy never gets old, but athletes are always training, getting their practice in. Getting coached. Taking on data & feedback, to find areas of performance. Trying new things. It can’t be forgotten that marketing is a performance driven function.
How do marketing analytics help determine your return on investment?
Marketing analytics seek to capture the response from the market from your investment. That response is the return on investment.
The metrics that might help quantify that return on investment could be:
- How many consumers reached
- How much they engaged
- If their perceptions were changed, or if they took action
Answering this in totality, answers the question on what the quantifiable return on investment was.